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Why You Should Care About Your Employees’ Mental Health

In April 2016, the World Health Organization released the reports of its study exploring the link between mental health and economic productivity. In it, the WHO estimated that depression and anxiety disorders cost the global economy approximately $1 trillion each year.  Dr. Margaret Chan, the Director-General of the WHO said, “We know that treatment of depression and anxiety makes good sense for health and wellbeing; this new study confirms that it makes sound economic sense too.”

As data continues to emerge, more and more employers are aware that a mentally healthy workforce is linked to lower medical costs and can help to lower rates of absenteeism and presenteeism. For the uninitiated, absenteeism refers to an employee’s habitual or intentional absence work and presenteeism refers to an employee’s presence at work despite illness, injury, or another condition which results in reduced productivity. So an employee who attends work but is unable to operate at their normal levels of productivity, rather than missing work altogether, contributes to presenteeism.

According to the United States Surgeon General, one in five adults (20%) will experience a diagnosable mental illness in any given year and that approximately 15% of those affected will also experience a substance abuse disorder that co-occurs with mental illness.

The National Alliance on Mental Illness reported that only 41% of adults in the United States living with a mental health condition received mental health services in the past year, and that only a third received care that NAMI deems adequate for treatment. This leaves 59% of adults suffering from mental illnesses without the medical and mental health care they require to lead happy, healthy, and productive lives both in and outside of the workplace.


Mental Health Issues Can Cut Into Profits, Increase Costs and Decrease Productivity

Untreated depression alone costs the U.S. economy over $44 billion dollars in absenteeism from work, amounting to over 200 million days of lost work each year, lost productivity, and direct medical treatment costs to employers. Mental health conditions are the second highest leading cause of absenteeism in the workplace, according to the American Psychiatric Foundation. Individuals who suffer from mental illnesses are at an increased risk of suffering from other chronic medical conditions. On average, adults with serious mental illnesses die 25 years earlier than other American adults. In total, mental illnesses cost the US economy $193.2 billion in lost earnings each year.

A mentally unhealthy workforce is correlated with increased medical costs and a decrease in employee productivity. However, investment in the mental health benefits and programs administered to employees does generate a high return on investment. The WHO reports that every $1 invested in increasing treatment availability and quality of care leads to a return of $4 in better health, productivity, and ability to work.

This ROI is promising, particularly for businesses plagued by chronic absenteeism and presenteeism. Beyond the enormous cost that lost earnings and profits have on the economy as a whole, employees who are mentally healthy are more productive, are more present at work, and are able to contribute meaningfully to the business as a whole.


Creating a Mentally Healthy Environment

So, how do you make a healthy workplace to encourage the development of a healthy workforce? The American Psychiatric Foundation’s Partnership for Workplace Mental Health program recommends a thoughtful and intensive process for employers to undertake. Employers must first understand what their current health plan covers in regards to mental health treatment.

Does the plan cover outpatient and inpatient care? How are employees informed about the scope of their health benefits? Are the current benefits offered sufficient to ensure employees receive an adequate level of care in respect to mental illnesses? All of these questions, and more, must be thoughtfully and carefully investigated before employers can consider extending mental health coverage in their preexisting plans or adopting new policies.

With the passage of the Affordable Care Act and its incremental changes to the medical marketplace, employers who offer medical policies to their employees have more mental health coverage options than ever previously available. Employers may also consider employee assistance programs to complement health policies. EAPs, like investments in mental health policies, have been shown to improve employee emotional well-being and productivity.


While investing in the mental health of employees is certainly an economic decision, it can boost company morale and contribute positively to company culture. Employees who feel as though they are valued by their employers, and an employer’s investment in their employee’s mental and physical well-being can certainly signal value, are more likely to remain at that company and be productive workers for a longer period of time.

In addition, a positive company culture where employees feel valued can serve to attract and retain employees, encourage productivity and attendance, and strengthen leadership. In sum, healthy employees are good for business, both in respect to reduced medical costs and to increased productivity.

Cassidy Welter on Twitter
Cassidy Welter
Staff Writer: Cassidy Welter is a Chicago based researcher at a consulting firm specializing in nonprofits. When she's not working, she's reading anything she can get her hands on, debating politics, watching the Pittsburgh Penguins and eating her way across the city's food scene. See more from Cassidy on Twitter at @CassidyWelter.

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Entrepreneurial Lifestyle · Leading Your Team · Your Mindset

Staff Writer: Cassidy Welter is a Chicago based researcher at a consulting firm specializing in nonprofits. When she's not working, she's reading anything she can get her hands on, debating politics, watching the Pittsburgh Penguins and eating her way across the city's food scene. See more from Cassidy on Twitter at @CassidyWelter.